Clean energy meets inclusive development

From the new Africa Progress Report, released today, 5 June 2015: Graca Machel, founder of the Graca Machel Trust, comments: “The information in report will shock you, but it will give indications of what can be done and that will give you hope.”

She points out that, at the rate we are currently providing electricity, it will take until 2080 to reach every Africa. “None of us will be here,” she says. “And we cannot take the risk of leaving to future generations what we have the capacity to do now.

“We need to examine the risks and opportunities and seize the opportunities.”

A lot is being spoken about industrialisation on the continent, about accelerating the building infrastructure of all kinds, about expanding health and education.

“It is clear that the energy sector has to be the engine of all this,” says Machel. “Clearly we have to increase our capacity to provide energy to citizens and to industry.”

She adds that Africa is rich in energy-generating resources. “What are the steps we are taking to make the right choices to develop energy without increasing the risks to people and the planet?”

This year, 2015, is a an important one in energy circles, with a number of international meetings set to agree sustainability goals and emission goals.

“This year we are going to make huge commitments for how, in the next three decades and beyond, we will do the right things in an accelerated way.

“Yes, we use the natural resources we have such as gas and mineral resources to accelerate the provision of energy to people. But we need to use clean and renewable energy.

“As a continent we have contributed the smallest part of carbon emissions, so we didn’t cause the problems, but Africa has a responsibility to take the lead in proving that you can develop with clean and renewable energy.

“We have the opportunity to make those choices; and we challenge governments to have clear plans on balancing the provision of energy using the resources we have, but predicated on clean and renewable energy.”

Machel believes 2015 will be the year of big decisions and a bold approach to development. “It is the year in which we have to accept that we don’t have a choice. Climate change is with us and we need to counter its effects and its impact on people. It is not a question of whether we like it or not; we have to take responsibility.

“If we don’t want to have the droughts, floods, refugees and women suffering to get fuel and water, we don’t have choice. Failure to change the way we do business is almost suicide for us.”

Trevor Manuel, the author of South Africa’s National Development Plan, urges leaders to take cognisance of the report. “The fact that we will only be able to electrify Africa by 2080 is unacceptable; we cannot leave our people behind like that.

“In the context of clean energy, we need to leapfrog the rest of the world.”

Manuel would not be drawn on the issue of nuclear, saying on that there is a variety of different options that include renewables and nuclear.

He points out, however, that Germany as an example has begun the decommissioning of its nuclear plants and plans to decommission its coal plants as well in favour of renewable energy.

The Africa Progress Report, “Power, People, Planet: Seizing Africa’s Energy and Climate Opportunities”, stresses that Africa does not have to choose between economic growth and low carbon development, but that bold action needs to be taken to ensure it moves on the path of clean energy.

It calls for a 10-fold increase in power generation to provide all Africans with access to electricity by 2030. This would reduce poverty and inequality, boost growth, and provide the climate leadership that is sorely missing at the international level.

“We categorically reject the idea that Africa has to choose between growth and low-carbon development,” says Kofi Annan, chair of the Africa Progress Panel. “Africa needs to utilise all of its energy assets in the short term, while building the foundations for a competitive, low-carbon energy infrastructure.”

In sub-Saharan Africa, 621 million people lack access to electricity – and this number is rising. Excluding South Africa, which generates half the region’s electricity, Sub-Saharan Africa uses less electricity than Spain. It would take the average Tanzanian eight years to use as much electricity as an average American consumes in a single month. And over the course of one year someone boiling a kettle twice a day in the UK uses five times more electricity than an Ethiopian consumes over the same year.

Power shortages diminish the region’s growth by 2% to 4% a year, holding back efforts to create jobs and reduce poverty. Despite a decade of growth, the power generation gap between Africa and other regions is widening. Nigeria is an oil exporting superpower, but 95-million of the country’s citizens rely on wood, charcoal and straw for energy.

The report reveals that households living on less than $2.50 a day collectively spend $10-billion every year on energy-related products, such as charcoal, kerosene, candles and torches. Measured on a per unit basis, Africa’s poorest households are spending around $10/kWh on lighting – 20 times more than Africa’s richest households. By comparison, the national average cost for electricity in the US is $0.12/kWh and in the UK it is 0.15/kWh.

* Redirect the $21-billion spent on subsidies for loss-making utilities and electricity consumption – which benefit mainly the rich – towards connection subsidies and renewable energy investments that deliver energy to the poor.

The report also calls for strengthened international cooperation to close Africa’s energy sector financing gap, estimated to be $55-billion annually to 2030, which includes $35-billion for investments in plant, transmission and distribution, and $20-billion for the costs of universal access.

A global connectivity fund with a target of reaching an additional 600-million Africans by 2030 is needed to drive investment in on- and off-grid energy provision. Aid donors and financial institutions should do more to unlock private investment through risk guarantees and mitigation finance.

The report challenges African governments and their international partners to raise the level of ambition for the crucial climate summit in Paris in December, and calls for wholesale reform of the fragmented, under-resourced and ineffective climate financing system.

G20 countries should set a timetable for phasing out fossil fuel subsidies, the report states, with a ban on exploration and production subsidies by 2018. “Many rich country governments tell us they want a climate deal. But at the same time billions of dollars of taxpayers’ money are subsidising the discovery of new coal, oil and gas reserves,” says Annan. “They should be pricing carbon out of the market through taxation, not subsiding a climate catastrophe.”

While recognising recent improvements in the negotiating positions of the European Union, the US and China, the report says that current proposals still fall far short of a credible deal for limiting global warming to no more than 2-degrees above pre-industrial levels. It also condemns Australia, Canada, Japan and Russia for effectively withdrawing from constructive engagement on climate.

“By hedging their bets and waiting for others to move first, some governments are playing poker with the planet and future generations’ lives. This is not a moment for prevarication, short-term self-interest, and constrained ambition, but for bold global leadership and decisive action,” Annan comments.

“Countries like Ethiopia, Kenya, Rwanda and South Africa are emerging as front-runners in the global transition to low carbon energy. Africa is well positioned to expand the power generation needed to drive growth, deliver energy for all and play a leadership role in the crucial climate change negotiations.”

Linah Mohohlo, governor and chairman of the board of the Bank of Botswana, points out that energy shortages don’t affect just businesses, but education and health as well.

She says African governments, investors and financial institutions all have a role to play in providing clean energy to the poorest consumers, and could lift 26-million people out of poverty.

“Closing the African energy deficit would be a triple win for poverty, climate and sustainable development.”

Michel Camdessus, personal representative of the President of France to Nepad and honorary governor of Banque de France, believes the world is standing at a crossroads.

“I am certain that we now have the power to make a decisive difference to both climate and poverty, provided our leaders decide to act together for the common good and find the support from all stakeholders.”

He points out that, thanks to formidable breakthroughs in clean energy technology, climate and development are no longer on a collision course. “Efforts on the climate side can serve development, particularly inclusive development,” he says. “This is a new but decisive development.

“Connecting the poor to clean energy and safe cooking cuts poverty, saves lives and helps people to become more resilient to the effects of climate change.”